Prime Minister Baburam Bhattarai’s India Trip

OCT 20 – No visit by a Nepali Prime Minister to New Delhi has generated as much attention as that of Maoist leader Pushpa Kamal Dahal’s in September 2008. There was a good reason.

His party CPN (Maoist), underground only until two years ago, had thumped traditional powerhouses in their first open elections. Though Maoist leaders and India’s Prime Minister’s Office (PMO) had worked closely to make the 12-point agreement between the Maoists and the Seven Party Alliance (SPA) possible, people in New Delhi were still not sure how the force that had historically regarded India as “expansionist” would respond in New Delhi.

What added to the element of suspense was dynamics of day-to-day politics. The Koshi had just burst its embankment and huge swathes of Saptari and Sunsari districts remained flooded, raising political temperature in Kathmandu.

There was another reason why Dahal’s visit was eagerly awaited in New Delhi and this one had a larger, and strategic, meaning. In travelling to Beijing immediately after his appointment as the prime minister to attend the closing ceremony of Olympic Games, Dahal had made a policy departure—at least in the Indian eye. He was the first Nepali Prime Minister (in recent times) not to make New Delhi his first foreign visit.

“No other recent visit to India has been so eagerly awaited,” observed a paper by New Delhi-based IDSA, an establishment think tank, after Dahal’s 2008 visit, “as that of Pushpa Kamal Dahal, alias Prachanda, the Maoist revolutionary-turned-democrat and Prime Minister of ‘New Nepal.’”

PM Bhattarai arrives in New Delhi

By Mahesh Acharya

Prime Minister Baburam Bhattarai has arrived here in New Delhi with 37-member official delegation for his four-day visit on Thursday. Indian officials, including Ambassador to Nepal, Jayant Prasad received Bhattarai and his team this afternoon.

The Cabinet had endorsed his agenda for India visit yesterday. Amid strong protest and reservations from four Maoist ministers, the Cabinet endorsed signing of the Bilateral Investment Protection Agreement (BIPA) with India, Double Taxation Avoidance Agreement, which will end the need for Indian investors to pay taxes back home on repatriation of income once they pay taxes in Nepal and to clinch the $250 million line of credit with India that New Delhi had announced in 2010 during the state visit of President Ram Baran Yadav.

Besides clinching the three agreements, the PM will request support for a dozen projects for infrastructural development. The PM is also likely to seek a soft loan of US $1 billion for the construction of a Kathmandu-Tarai fast track. The fast track will link Kathmandu and Nijgarh in the Tarai, where Nepal is preparing to build an international airport. The PM is also expected to seek Indian help for construction of the airport.

Bhattarai will also take up the issue of importing 250 MW electricity from India and construction of a transmission line of 440 kv between Mujaffarpur and Dhalkebar.

Despite his visit to Beijing, and suspicion surrounding his position, Dahal ended up courting the Indian political class strongly and was able to win their hearts and minds. The same IDSA paper echoes his success in New Delhi: The Nepali Prime Minister had visited Beijing “to assuage the anti-India forces and to give an impression that the government is not bowing to Indian pressure…”

Clearly, the fault lines in Maoists’ (read: Dahal’s ) relationship with Delhi began to appear after the visit. Two years on, it is difficult to pin down where exactly it went wrong.

But it would be worth trying to narrow them down—on the eve of another India visit by another Maoist Prime Minister, Baburam Bhattarai.

Analysts say Delhi took exception to Dahal on three broad counts: His alleged China tilt, failure to stick to specific promises he made with Indian leaders during the 2008 visit (including on the number of combatants to be integrated) and his inability to take members of the SPA, signatory to the 2005 agreement with the Maoists in New Delhi, along.

“The turning point of course was his decision to sack Army chief Rookmangud Katawal,” says Bhek B Thapa, former Foreign Minister and Ambassador to India. “Delhi feared that the Maoists wanted to go far and that could be a source of instability, including in India because of the open border.”

Subsequently, 20 months of Madhav Kumar Nepal’s premiership proved a couple of points. He had assumed office in the backdrop of acrimonious New Delhi-Maoist relationship and Delhi did all it could to keep the Maoists from coming back to power. When Jhala Nath Khanal was elected prime minister in February, it proved yet another point: That New Delhi can leverage its influence in Nepal in many ways, yet it is the domestic political needs that will decide the ultimate outcome.

“Results were even,” recalls Thapa. “Both perhaps realised at this point they had no choice but to work together. New Delhi was keen to review its Nepal policy. Isolating the Maoists, the biggest party, would not help achieve its foreign-policy goals in Nepal long term but Bhattarai became a more credible leader in the Maoist party.”

Prime Minister Bhattarai, who came to power in this backdrop, has to negotiate a tightrope walk in his current visit to India. He needs to be seen as a more consistent leader than his party chairman by New Delhi but, in doing so, he also needs to be acceptable to his own party and a large constituency outside his party. That is not going to be easy.

Already, sections of CPN-UML and civil society think he is more “pro-Indian” than Madhav Kumar Nepal ever was. Additionally, ‘nationalists’ across the party line are disenchanted with Bhattarai, not least because he took weeks to sack Defence Minister Sarat Singh Bhandari for ‘treason,’ reference to Singh’s remarks that the latent anger in Tarai, which, if not handled well, could lead to secession.

But the Maoist party’s obfuscating official statement on Tuesday refused to condemn Minister Bhandari, further demonstrating the difficulties Bhattarai faces in managing the ruling coalition in deeply polarised times.

While charges of sellout are nothing new for Nepali prime ministers, Bhattarai’s ‘nationalist’ credentials will be heavily scrutinised in Kathmandu and political sincerity in New Delhi, in the days after the visit. Girija Prasad Koirala, who arguably managed India ties best, faced the charges of sellout after the agreement on Tanakpur Barrage in New Delhi in 1991 but his nationalist credentials remained largely unscathed.

What helped Koirala was his relationship with Indian political leaders, which allowed him to extract concessions from them whenever he found himself in a tight spot. He was, for instance, able to take key Indian leaders into confidence that inviting UNMIN, the United Nations political mission to Nepal, didn’t run counter to Indian national interests.

Bhattarai has his task cut out. It’s no secret that he seeks huge Indian investments in infrastructure development, both in ‘hardware’ (hydropower, fast-track road from Kathmandu to Tarai, etc) and ‘software’ (in establishing state-of-the-art technical schools in line with India’s IITs). But to get them, he will have to find a right balance between addressing Indian concerns for security for their investments and Nepali concerns that such a safety net could extract a huge toll on Nepali economy given Nepal’s political volatility.

GMR, an Indian company which has reportedly invested more than Rs 500 million in Upper Karnali, had its field office in Dailekh vandalised in June by miscreants close to the Baidya faction. “In a fast globalising world, capital flows where the investment climate is friendly and it’s a fact that GMR has a stellar track record,” says a former government secretary with vast experience in inter-country negotiations. After a successful construction and operation of world-class airports in New Delhi and Hyderabad, GMR has been invited farther afield to Turkey and Maldives. So how do you balance between the desperate needs for investments and the attendant risks in a volatile country like ours?

Analysts, as the former senior government official, suggest a cap could be put on the liability for the home country and also room for a third-party arbitration in case of compensation demands.

For its part, New Delhi has other set of concerns too. It will be hard pressed to protect its investors no doubt. But it is also anxious to see a stable and prosperous Nepal, with whom it shares what is truly a unique bilateral relationship marked by an open border, a common culture and people-to-people ties.

With all the talk of investments and safety guarantees, the most crucial meeting, therefore, will be between the two prime ministers when they meet one-on-one on Friday. “Our prime minister’s biggest challenge will be to build mutual trust which is currently missing,” says Prof Lokraj Baral, former ambassador to India. “The number of projects and volumes of aid are peripheral to sound relations. Many things will naturally fall into place when the relationship is based on mutual trust.”

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